The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans, Direct Unsubsidized Loans and PLUS loans. These loans are federal student loans for eligible students and/or parent to assist with the cost of higher education at a four-year college or university, community college, trade, career, or technical school.
Please note that information disclosed to students and or their parents regarding the HEA Loan is submitted to the National Student Loan Data System (NSLDS) and to the Department of Education. This information may be accessible by authorized agencies, vendors, lenders, and institutions.
Basic eligibility requirements for students requesting a Direct Loan:
Direct Loans are subject to a loan fee, minus an up-front interest rebate that is contingent upon 12 months of on-time payments when the loan enters repayment. You can find more information about the loan fees and interest rebate on the Direct Loan Website: www.ed.gov/DirectLoan.
As a borrower, you have a right to cancel all or any part of these loans within 14 days of receiving notification from your campus of the award. If you do wish to cancel any part of the loan, please notify your campus financial aid office and pay any outstanding balance to the Business Office immediately. If you accept the loans as awarded, no further action is necessary on your part.
If you would like to cancel and or modify your loans, please complete this form Loan Cancellation-Reduction Form.docx to you campus financial aid office.
In acknowledgement of your service to our country, there are special benefits and repayment options for your student loans available from the U.S. Department of Education and the U.S. Department of Defense. For more information about
Federal Student Aid for military students Click Here.
As with all federal student aid, you apply for Direct Loans by filling out the Free Application for Federal Student Aid (FAFSA). The information on your FAFSA is transmitted to the schools that you list on the application, and those schools use the information to assess your financial need for student aid.
Steps to apply for a loan after the FAFSA has been completed.Contact your financial aid office; they will guide you in the completion of the required documents. A Loan Request Form is required by each campus for all loans. This document will be placed on your online financial aid file.
Once you have completed the Loan Request Form from your campus, go to
www.studentloans.gov and complete the following:
I. Required Counseling Sessions: Students who are requesting loans must complete the entrance counseling sessions.
II. Once you have completed the Direct Loan entrance counseling sessions, you will need to complete the Master Promissory Note - Master Promissory Note
III. If this is your last semester, you will need to complete the exit counseling sessions prior to the second disbursement of your loan. Exit Counseling
Repayment begins six months after you graduate or cease to be at least a halftime student. You will generally have 10 years to pay back your loan. Your monthly payment will usually be more than $200, but never less than $50. It is the borrower's responsibility to maintain contact with the United States Department of Education and to establish a repayment schedule. The borrower's failure to inform the United States Department of Education of changes in enrollment status, anticipated graduation dates, current address, name, deferment eligibility, or college of attendance may result in default on the student loan.
The Financial Aid Office will tell you the loan amounts that it is offering, check your online financial aid account with your campus for the amount of your loan. You should evaluate the loan offer carefully. In the case of loans, keep in mind that whatever amount you borrow must be paid back with interest. If your living expenses are not as high as the standard allowance projected by your school, you may not have to borrow as much as the amount offered. The Department of Education offers financial awareness counseling - Financial Awareness Counseling
You have the right to decline/cancel the loan or to request a lower loan amount. This is done through your online financial aid account.
This is a loan that parents may request to assist a student with his/her costs of attendance.
A credit check will be performed and used to determine the loan amount.
Credit check & endorser alternative
When you apply for a Direct PLUS Loan, the Department will check your credit history. To be eligible to receive a PLUS loan, you must not have an adverse credit history. If you are determined to have an adverse credit history, you may still receive a Direct PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. If you are a parent borrowing on behalf of your dependent student, the endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to our satisfaction that there are extenuating circumstances related to your adverse credit history.
California public two year institutions have the lowest enrollment fees and tuition in the nation; and, Direct Loans have aggregate limitations for undergraduate students. As such, students are advised to borrow wisely and only borrow what you need so that you have remaining funds to complete your four-year degree.
The amount of financial aid a student may receive cannot exceed the student's cost of attendance (COA) and/or financial need. Your student budget is located on your online financial aid file; log in through MyOCC, MyGWC, or MyCCC. If your expenses are over and above the budget, please schedule an appointment to meet with a financial aid specialist at your campus.
1Except those whose parents are unable to borrow a PLUS loan.2These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.3The numbers in parentheses represent the maximum amount that may be subsidized.4Graduate and professional students are not eligible to receive Direct Subsidized Loans for loan periods beginning on or after July 1, 2012.5The aggregate amounts for graduate students include loans for undergraduate study.
The actual loan amount you are eligible to receive for an academic year is determined by your school and may be less than the maximum annual amounts shown in the chart above. The aggregate limits include both Direct Subsidized and Unsubsidized Loans and any subsidized and unsubsidized Stafford Loans received through the Federal Family Education Loan (FFEL) Program.
With a Direct PLUS Loan, a graduate/professional student or the parent of a dependent student can borrow up to the cost of the student's attendance minus other financial aid the student receives.
Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan (there are several) you choose.
The Direct Loan Servicing Center will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the Standard Repayment Plan, with fixed monthly payments for up to 10 years. Most Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period.
You can change repayment plans at any time by going to the Direct Loan Servicing Center's website and logging in to your account.
Interest rates for variable-rate loans under these programs are determined annually, and are based on the following:
These rates do not affect Federal Stafford or Federal PLUS loans made on or after July 1, 2006 that are subject to fixed-rates.
Interest Rate Chart
For more information regarding the interest rate and the calculations:
The terms of the sequester increase the loan fees charged to Direct Loan borrowers for Direct Subsidized, Direct Unsubsidized and Direct PLUS loans from their statutory rates of 1 percent and 4 percent, respectively.
For loans where the first disbursement is made on or after October 1, 2016 and before October 1, 2017 –
The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans is 1.069%. For example, the fee on a $5,500 loan will be $58.79.
The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) is 4.276%. For example, the fee on a $10,000 PLUS Loan will be $427.60.
The following chart shows the sequester-required loan fees for FY 2016 and FY 2017.
As a reminder, the amount of the loan fee for a loan is determined by the date of the first disbursement of the loan. Any subsequent disbursements, even if made on or after the relevant October 1, have the same loan fee percentage that applied to the first disbursement of that loan
UPDATE - - New loan repayment terms are now available. New Repayment Terms
Example of a repayment for a subsidized loan:
Student borrows $18,000 in subsidized loans at 2% interest; student is single, living in CA with an adjusted gross income of $50,000. The repayment schedules would be:
Standard Repayment Plan 120 months $166/month total repayment $19,875
Graduated Repayment Plan 120 months $91.00 - $272/month total repayment $20,305
Revised Pay as You Earn (RePAYE) 62 months $270 - 368$/month total repayment $19,005
Example of a repayment for an unsubsidized loan:
Student borrows $18,000 in subsidized loans at 6% interest; student is single, living in CA with an adjusted gross income of $50,000. The repayment schedules would be:
Standard Repayment Plan 120 months $200/month total repayment $23,980
Graduated Repayment Plan 120 months $114 - $343/month total repayment $25,582
Revised Pay as You Earn (RePAYE) not available for unsubsidized loans
Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan (there are several) you choose.
Your loan servicer will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the standard repayment plan, with fixed monthly payments for up to 10 years. Most Direct Loan borrowers choose to stay with the standard repayment plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period.
You can change repayment plans at any time by contacting your loan servicer.
There are two ways to access the Repayment Estimator:
1. Log in to StudentLoans.gov using your FSA ID and Select "Repayment Estimator" on the left-hand navigation bar
You must log in using your own FSA ID. If you are a new user or have forgotten your FSA ID, click here.
Use of another person's FSA ID constitutes fraud. Use only your own FSA ID information.
2. Select "Repayment Estimator" under "Managing Repayment" on the top navigation bar of the StudentLoans.gov home page.
Your spouse's eligible federal student loans and income may be taken into account if:
If either of these apply, your spouse's income, loan amount(s) and interest rate(s) should be added to provide more accurate payment information.
Calculations assume income increases of 5 percent a year, and poverty guideline increases of 3.3 percent a year.
Loan Repayment Calculator
Another tool to assist you with calculation your loan repayment can be found at this link: http://www.finaid.org/calculators/loanpayments.phtml
When you receive your first bill, you'll learn how you can sign up for the electronic debit account (EDA) option and have your bank automatically make your monthly loan payments for you from your checking or savings account. You won't have to write checks, use stamps, or worry if your payment will arrive by the due date. In addition you'll receive a 0.25% reduction in the interest rate on your loans during any period when your payments are made through EDA.
If you're having trouble making payments on your loans, contact your loan servicer as soon as possible. Their staff will work with you to determine the best option for you. Options include:
If you stop making payments and don't get a deferment or forbearance, your loan could go into default, which has serious consequences—see below.
Your loan first becomes "delinquent" if your monthly payment is not received by the due date. If you fail to make a payment, you'll receive a reminder that your payment is late. If your account remains delinquent, you'll receive warning notices reminding you of the consequences of default and of your obligation to repay your loans.
If you are delinquent on your loan payments, contact your loan servicer immediately to find out how to bring your account current. Late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus), but this is much better than remaining delinquent on your payments and going into default.
If you default:
Under certain conditions, you can have all or part of your loan cancelled or discharged. Please contact your loan servicer.
Stay in touch with your loan servicer—let them know if you've changed your name or permanent address, and make sure that they know when you've completed your educational program or transferred to another school.
For a Q&A, please follow this link: https://studentloans.gov/myDirectLoan/faqs.action